With several mid-sized companies successfully raising funds and a paradigm shift in Indian polity taking shape, more and more firms are looking to tap the primary market.
More than R7,000 crore worth of fresh paper is waiting to hit the markets, shows a compilation by Prime Database.
Seven companies already have the requisite approval from Sebi with a potential to raise nearly R3,000 crore. An additional 12-15 companies have either filed their drafts with Sebi or propose to tap the capital markets. These companies have the potential to raise an estimated R4,500 crore in total, data show.
Offers of four companies — Sharda Cropchem (R351 crore), Snowman Logistics (R197 crore), Wonderla Holidays (R181 crore) and Shemaroo Entertainment (R120 crore) — were subscribed multiple times in the first six months of the current fiscal.
Investment bankers said the ‘business-friendly’ tag of the new government are prompting many companies to go in for capacity expansion as well as debt reduction. More companies will follow suit with a potential to raise another R5,000-6,000 crore in the next one year, said investment bankers.
“I think everyone was waiting for the elections. I believe there will be a flurry of activity in the IPO market. Elections played a big role,” said Ajay Saraf of ICICI Securities. “During a bull market, interest levels of investors is far higher and they look at a wider landscape, or companies and sectors… You will see more issuances as markets pick-up,” said Indraneil Borkakoty, MD, IDFC Investment Banking.